On Wednesday, President Donald Trump signed the United States-Mexico-Canada Agreement (USMCA) into law. The USMCA contains a number of key and last-minute revisions that implicate biologic medicines and patent obligations. In the original version of the USMCA, Canada and Mexico would have been required to extend the exclusivity provided to new biologic medicines and provide ten years of exclusivity. The United States provides 12 years of exclusivity under the Biologics Price Competition and Innovation Act of 2009 (BPCIA), meaning a biosimilar version of an innovator drug cannot be approved for 12 years following the approval of the innovative biologic medicine. Canada provides eight years of exclusivity for biologic medicines, and Mexico provides five years for small-molecule drugs. The USMCA, as signed into law, does not include the ten-year requirement. It merely provides for at least five years.
The USMCA was also amended to remove the obligation to provide patents for new uses of a known product. In the United States, it has long been established that new uses of old drugs are patentable. The USMCA as signed into law also does not have a provision requiring three additional years of exclusivity of clinical information submitted in connection with new uses of previously approved medicines.
House Democrats describe each of these amendments to the USMCA as “preserv[ing] Congress’s ability to change U.S. law to improve access to affordable medicines.” In other words, the USMCA does not prevent Congress from lowering the exclusivity provisions in the United States or from changing substantive U.S. patent law. The Pharmaceutical Research and Manufacturers of America (PhRMA) noted that by failing to raise the standards for protecting innovation abroad, the USMCA allows our trading partners to “free ride on America’s global leadership in biopharmaceutical research and development.” Leveling the playing field would have allowed pharmaceutical companies to better recoup the enormous costs of discovering and developing new biologics abroad. The Biotechnology Innovation Organization (BIO) expressed a similar view: “Surrendering the biologic provisions perpetuates foreign free-riding on American innovation at the expense of American patients.” The exclusivity provisions would have helped ensure that “Canada and Mexico paid more of their fair share for U.S. innovation.”
House Democrats describe removal of the provision confirming that patents would be available for new uses of known products as furthering price reduction. They say “[t]his provision would have locked in the practice of ‘patent evergreening,’ in which pharmaceutical companies obtain hundreds of patents related to a product to block generic competition and price reductions.” These comments misapprehend the role of patents and innovation. New uses of known medicines will not be discovered and established through years of research and clinical trials unless they can be patented. And the U.S. Supreme Court has long recognized that new uses of known products are patentable. How does it help patients not to have such a provision or for Congress to preserve the ability to modify substantive patent law? New lifesaving treatments simply will not be developed if they cannot be patented, and American patients will be the losers. The three-year period of clinical exclusivity, another provision eliminated by the House, was there to encourage innovation and the discovery of new treatments requiring new and expensive clinical trials. Rather than “delay[ing] competition and access to affordable medicines,” the exclusivity period encourages new discoveries and needed treatments that otherwise would not be developed.
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